What Makes mETH Stand Out with Over 480000 ETH in Pledged Amount

CoinCircle News Report:
Currently, the amount of ETH staked on mETH has exceeded 480,000, and the TVL has risen to 1.189 billion USD.
Written by: 1912212.eth, Foresight News
Three years ago, Dragonfly partner Haseeb Qureshi expressed his anticipation for Rollup, but also his concern that it might not be well-received at the time. At that time, chains like Polygon and BNB Chain were gaining popularity and attracting a lot of attention. However, the L2 mainnets that are now in the forefront were not yet launched at that time. Who would have thought that in just 2 years, the L2 space would become so vibrant, with numerous projects competing for attention.
If we say that there are only a few emerging public chains, then the number of L2 solutions today is almost uncountable. However, although the cost of building new L2s has become relatively low, there are relatively few that have gained market attention and recognition.


In terms of technical differences, the race is still between Optimistic Rollup (OP) and Zero-Knowledge Rollup (ZK), but what really sets them apart is the development of their ecosystems, user experience, and liquidity incentives.
Currently, apart from the leading L2 solutions, the gap in TVL between other L2s is not too significant. The differences in minor details are also somewhat dull, which has led to various issues.
One of them is fragmented liquidity. L2s have been criticized for having increasingly dispersed assets circulating on Layer 2, and it is time-consuming and laborious to transfer assets to other L2 chains, which affects user experience. This is also one of the important reasons why some market funds prefer and flock to high-performance public chains.
The second is the widespread lack of the wealth effect. Many L2s have not seen a meme frenzy, while the meme wave has appeared on high-performance public chains like Solana. Although some applications have developed their ecosystems using L2 technology infrastructure, they are still not as attractive as the wealth effect. In addition, the lackluster performance of their token prices has gradually weakened the attractiveness of L2 to ordinary players.
Finding solutions to the fragmented liquidity problem and finding ways to expand asset income channels for players have become the breakthrough for some L2 solutions.
Introduction to mETH Protocol
mETH is an Ethereum-based permissionless and non-custodial ETH liquidity staking protocol. At the end of 2023, Mantle targeted the opportunity of liquidity staking and launched Mantle LSP. In August of this year, the brand name was upgraded from Mantle LSP to mETH Protocol. mETH stands for Mantle staked ether, which is more concise and in line with the brand image.
For each ETH staked, users receive mETH staking tokens. Upon unstaking, users can receive their original staked ETH and staking rewards.
Although Lido dominates the ETH staking market, the rankings of subsequent protocols are quite volatile, and the competition is fierce. Data shows that currently, the amount of ETH staked on mETH has exceeded 480,000, and the TVL has risen to 1.189 billion USD.
mETH has over twice the amount of staked ETH on Coinbase. Considering that Binance is the second-largest in terms of staked ETH and the pioneer in traditional staking protocols, mETH’s achievements are quite impressive.
In its official documentation, mETH is described as aiming to become the most widely adopted and capital-efficient ETH staking token. Currently, various brand collaborations and integrations have indeed played a crucial role in expanding the boundaries of mETH and eating into the market share of its competitors.
In terms of risk management, mETH’s core smart contract and off-chain services are non-custodial, which minimizes risks. It also adopts the design after the Ethereum Shanghai upgrade, emphasizing the integrity of ETH, and the mETH on L1 does not add complexity with other POS tokens and chains. This opens the door for various future integrations.


In the rapidly changing market landscape, the re-staking track represented by Eigenlayer has once again ignited a competition among liquidity staking protocols. This has led to the emergence of various re-staking protocols such as Swell, Renzo, and eth.fi, shaking up the industry.
Given the trend, it is only natural for mETH to enter the re-staking track.
Re-staking cmETH
Re-staking allows the reutilization of staked assets in PoS chains to protect other Ethereum-based protocols. This allows DApps to leverage the security of Ethereum’s PoS instead of creating their own staking mechanisms, thereby enhancing the utility of staked ETH beyond its primary network security function.
The mETH protocol allows users to benefit from the capital efficiency, convenience, and wide range of use cases on Mantle. However, there is a decrease in efficiency when staking in DeFi, as it locks up assets. Re-staking helps maximize capital efficiency. Following mETH, the re-staking protocol cmETH has also emerged.


Users can deposit their LST into the re-staking protocol, with security provided by oracles, cross-chain bridges, and the DA layer. Some staking rewards and income will also flow back into cmETH.


Advantages of liquidity assets
Capital efficiency is important in the cryptocurrency market. Apart from the annualized yield of 3.43% that can be obtained from staking ETH, the staked receipt token mETH also has native income-generating functionality. Native income should not be underestimated. When an asset itself has income-generating properties, users who cross-chain their ETH to L2 can automatically enjoy interest, greatly attracting capital sensitive to income.
In addition, cmETH is aggressively expanding and continuously collaborating with other re-staking protocols such as EigenLayer, Symbiotic, and Karak. cmETH not only receives points but also enjoys certain income.


cmETH has achieved good composability in the Mantle ecosystem. Its holders can also enjoy the income from ETH proof-of-stake validation (provided by the underlying mETH), AVS active validation service rewards, COOK token rewards, and integration with other L2DApps. Its on-chain advantages are quite apparent.
Integrating protocols is not only about on-chain integration, but off-chain integration, especially cooperation with exchanges, is crucial. After all, on-chain players do not make up the majority, and there are quite a number of players who choose to leave their funds on exchanges due to factors such as liquidity and convenience.
Bybit has chosen to open the staking gateway for mETH and list mETH. According to CCData’s report, as of the end of September, Bybit’s spot market share has risen to the third-largest globally. CryptoRank data also shows that Bybit ranks second globally in terms of exchange app downloads, with 4.5 million downloads, second only to Binance. The exposure brought by the large exchange’s traffic has greatly boosted the visibility of mETH.
It is worth mentioning that mETH can also be used as collateral on Bybit. As we all know, the core function of collateral is to optimize stability in risk control, market liquidity, and credit guarantee. For large funds and trading teams, when an asset is listed on an exchange as collateral, it greatly expands the use cases of mETH. In turn, as more funds flow in, the liquidity of mETH increases, forming a virtuous cycle.
Market trends often change rapidly, and project teams and protocols can only amplify their influence by closely following the trends. Where will the future trends be? The direction of the market may have already been determined. In the future, mETH will also cooperate with highly anticipated projects such as Berachain and Fuel to strengthen liquidity integration.
COOK Token Economics
COOK is the new governance token of mETH. Currently, it is mainly used for voting on the direction of the ecosystem and other strategic matters. The total supply is 5 billion, with 15.1028% of it allocated to qualified users participating in the ecosystem activities of the first quarter.
In this allocation, 5% of the tokens are allocated to mETH, 4% to Mantle Rewards Station, 5% to the Puff Protocol, 1% to Puff NFT holders, and the remaining small portion to joint activity rewards.


It is worth mentioning that at a time when VC tokens are being criticized, few project teams are willing to make changes to token distribution. Retail investors are increasingly dissatisfied with the dominance of VC tokens, which leads to endless selling pressure and being trapped. Fairness is crucial. Allowing community members to participate in the wealth wave and profit is the right solution, and it is becoming more popular and receiving more attention.
Looking at the total token distribution of COOK, the core team and private financing shares only account for 10%, while 60% is allocated to the community and protocol treasury. This can be regarded as truly responding to market demands and considering fairness in the initial token distribution design.


Compared to the leading re-staking protocol Eigenlayer, which has a market capitalization of around 600 million USD, mETH currently has a TVL of nearly 1.3 billion USD, while Eigenlayer has a TVL of 11.15 billion USD, more than 8 times that of mETH. If we calculate based on TVL ratio alone, the estimated FDV of COOK upon listing may be around 700 million USD.
COOK is expected to launch this month, and there may be changes to specific details.
During the mETHamorphosis event from July 1st to the beginning of October, the data performance was impressive. mETH holders can accumulate points on Mantle by staking, interacting with ecosystem protocols, and adding liquidity, and these points can be exchanged for COOK.


With the formal end of the first quarter, the activities for the second quarter will be announced soon.
Summary
After months of FUD surrounding Ethereum, the market funds are now recovering. Many re-staking protocols experienced a prolonged decline in popularity after their token launches, due to the bearish market. However, with the Fed’s interest rate cuts, more yield funds will flow into DeFi, injecting more liquidity. The performance of the re-staking track and COOK is worth watching.